Labor Rights Perspective] SHEIN IPO Controversy: The End of China's Sweatshop Model?

 

After its attempt to list on the New York Stock Exchange ran aground, renowned fashion brand SHEIN has decided to shift its listing to London, sparking renewed controversy there. The Chinese-backed company has seen rapid growth in recent years, with a current market capitalization estimated at over $60 billion. Markets around the world should be flocking to it, but why is it facing resistance? SHEIN's predicament exemplifies the end of the China Model. Regardless of its packaging and trendy appeal, if the underlying system of slavery remains unchanged, even if it can flourish temporarily, it will struggle to find a lasting place in the international community.

Over the past three decades, as China's economy has rapidly embraced globalization, numerous multinational corporations have relocated their production processes to China, exploiting the country's sweatshops and authoritarian system to relentlessly lower costs. This model has not only generated enormous profits for these major brands, but also fostered the myth of China's "rise as a great power." However, after decades of globalization, governments and civil society have learned lessons and are promoting various policy changes, particularly focusing on whether multinational corporations are fulfilling their social responsibilities, including whether their overseas investments adhere to international standards in areas such as the environment, labor, and human rights. Against this backdrop, SHEIN continues to adhere to its legacy, exploitative Chinese model, using it as a competitive advantage, inherently running counter to the norms promoted by the international community.

"De-Sinicization" aims to improve international image

It's an open secret that Chinese-owned enterprises have intricate ties with the Chinese Communist Party. Even private companies are subject to tight CCP control and must comply with the Chinese government's propaganda and diplomatic needs. SHEIN, which markets itself internationally with its affordable fashion, has been aggressively pursuing a "de-Sinicization" strategy in recent years, leading to accusations of attempting to downplay its ties with the Chinese government. The company officially relocated its headquarters to Singapore in 2022, closing several existing subsidiaries in China and emphasizing its global presence. However, SHEIN's operations remain heavily reliant on its Chinese background. For example, the vast majority of its production lines remain in China and are subject to Chinese government regulations governing overseas listings. During the global COVID-19 pandemic, SHEIN actively engaged in interactive promotions with TikTok, another Chinese-owned giant, resulting in a staggering increase in user registrations and downloads.